Chair
Canadians have a reputation for modesty,
but surely the time has come to bury the
old stereotype. When we have something to
celebrate, we don’t hold back. Witness the huge
outpouring of national pride after the success
of Canada’s “Own the Podium” drive at the 2010
Vancouver Winter Olympic Games.
Confidence also seems to be driving Canadians’
views about our country’s long-term economic future.
Since the recession began in 2008, our economy has
continued to perform better than those of most other
major development nations. Our banking system has
been lauded as one of the most stable in the world
and our government finances are in relatively good
condition, with one of the lowest net public debt
levels of any industrialized country.
Prime Minister Stephen Harper recently spoke of
Canada as a “great country rising,” adding that we
are in much better shape fiscally than traditional
economic powerhouses such as the United States,
Europe and Japan. The Prime Minister then laid
down a marker of sorts: the goal of making sure
Canada is among the world’s “next generation of
economic powers.”
Can we do it? Can Canada prosper in a world in
which older powers are struggling, and at a time
when growth and investment are shifting to
emerging markets?
Arvind Gupta certainly thinks so. A professor
of computer science at the University of British
Columbia, Dr. Gupta was one of the founders of
Mitacs, a non-profit research network that creates
opportunities for promising young researchers and
scientists. “Canada has all the advantages to own the
economic podium,” he wrote in the Vancouver Sun
recently. Canada, he added, is blessed with a high
standard of living, strong communities and educated
citizens. We also have a culturally diverse population
and natural resources that are the envy of the world.

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Canadian companies and workers are more
exposed than ever to global competition. But
for those with the will and ambition to succeed,
the opportunities in the global marketplace
have also never been greater.

So we have the potential. Unfortunately, Canada
falls short in two areas that are among the keys to
success in the modern global economy: innovation
and productivity. Despite strong macroeconomic
fundamentals, our country’s performance in both
areas is weak by the standards of other advanced
economies. We need to fix that, or else we risk
long-term economic decline.

In this annual report, we profile more than a
dozen recent and ongoing R&D initiatives involving
CCCE member companies in close partnership
with universities and government. They vary widely,
from a project aimed at protecting sensitive whale
populations to the use of advanced simulation
technology to train the healthcare professionals
of tomorrow.

In particular, we need to find ways to maximize the
economic spinoffs from Canada’s impressive levels of
public investment in research and development. Our
country is a world leader in terms of government
spending on university research, yet in a 2007
comparison we ranked 14th out of 17 countries based
on the number of patents per million population.
To put it another way, we are clearly failing when it
comes to the commercialization of knowledge.

As a country, we have our work cut out for us.
Emerging economies such as China, India and Brazil
are raising their own productivity levels, graduating
large numbers of scientists and engineers, and
improving their technological capacity.

As an organization composed of the CEOs and
entrepreneurs of Canada’s leading companies,
the Canadian Council of Chief Executives is keenly
aware of the importance of improving Canada’s
innovation record. In 2010, we helped forge a
coalition of 50 leaders from business, academia
and supporting organizations to develop a national
innovation strategy. Later, CCCE member Tom
Jenkins of Open Text Corporation was selected
to lead an independent review of federal support
for research and development.

Canadian companies and workers are more exposed
than ever to global competition. But for those with the
will and ambition to succeed, the opportunities in the
global marketplace have also never been greater. It’s
time to set our sights on the podium, identifying
our strengths and working together to create the
conditions that will enable Canadian players to
become global champions.
Hartley T. Richardson
Chair

Dr. Gupta, who served on the federal review panel,
says there are signs that the pace of collaboration
between Canadian businesses and university
researchers is picking up. Since 2007, Canada has
climbed from 15th to 7th place in a ranking of countries
with extensive university-business collaborations.
And among the 34 developed countries that comprise
the Organisation for Economic Cooperation and
Development (OECD), Canada is number one in the
share of university research expenditures financed
by business.

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3

Message from the

President
and CEO

In the economic history of our country,
few dates hold as much significance as
October 4, 1987. On that day, a quarter century
ago, representatives of Canada and the United
States completed negotiations on the Canada-U.S.
Free Trade Agreement (FTA), a ground-breaking
and, at the time, fiercely controversial treaty that
put both countries at the leading edge of global
trade liberalization.
The FTA eliminated tariffs and reduced many nontariff trade barriers, but its real significance was that
it launched an evolutionary process that continues
to this day. It helped to change Canadians’ mindset,
reversing decades of inward-oriented economic
policies. And it inspired – in many cases compelled –
growing numbers of Canadian companies to look
beyond our borders for sales and opportunity.
From the implementation of Canada-U.S. free trade
in the late 1980s to the 1994 North American Free
Trade Agreement, to current and pending trade
liberalization talks with the European Union, India,
Japan and the Trans-Pacific Partnership, Canadians
are, to an increasing degree, reaching out to engage
with the global economy.
The theme of our annual report this year is
“Innovation, Productivity, Prosperity” – three words
that relate directly to Canada’s international trade
agenda and to the competitive challenges that
Canadian employers face in the global marketplace.
Competition stimulates innovation and compels
companies to become more productive, ensuring
better jobs and a more prosperous future for Canadian
individuals and families. Competition breeds
excellence. It drives companies to invest in research
and development, workplace training and new
machinery and equipment. It forces them to
become more responsive to customer needs.

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Canada overall has a lacklustre reputation for
business innovation, and our country’s productivity
performance is weak by the standards of other
advanced industrialized economies. But businesses
that are exposed to international competition, or that
aspire to integrate themselves into global value chains,
cannot afford to take anything for granted. To survive
and grow, they must take risks, innovate and adapt
quickly to the ever-changing marketplace.
Elsewhere in this report, we highlight a series of
examples of innovative thinking and practice by
member companies of the Canadian Council of Chief
Executives, often in close partnership with leading
university researchers.
Sometimes the innovation manifests itself in a
new product or a productivity-enhancing business
process. Sometimes it yields an environmental, health
or social benefit. And sometimes it shows up in a new
approach to recruiting and training the highly skilled
workers that are increasingly in demand in the 21st
century economy.

In 1985, a federal Royal Commission led by former
Liberal finance minister Donald S. Macdonald
described the prospect of reciprocal free trade
between Canada and the United States as a “leap of
faith.” Twenty-five years later, the leap has become a
race – a race that Canadian companies run every day,
in markets around the world. They, and Canada itself,
are stronger and smarter because of it.
The Honourable John P. Manley, P.C., O.C.
President and Chief Executive Officer

The theme of our annual report this
year is “Innovation, Productivity,
Prosperity” – three words that relate
directly to Canada’s international
trade agenda and to the competitive
challenges that Canadian employers
face in the global marketplace.

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5

Taking
the
lead

Canada is a world leader in
the share of university research
financed by the private sector.
Across the country, the pace of
university-business collaboration –
including joint R&D projects, industrial
internships and cross-sector research
networks – is on the rise. Some examples
of innovative research partnerships involving
CCCE member companies:

A different kind of liquidity
The potential long-term effects of climate change are many and varied:
from higher average temperatures and droughts to more intense rainfall
and flooding. The consequences can include serious property damage,
higher insurance costs, and changes to aquatic ecosystems due
to the thawing of permafrost, fluctuations in snowfall and
reduced water quality. Water conservation measures and
improved resource management strategies can play
important roles in mitigating these effects. To help
understand the impact of climate change and develop
strategies to improve our ability to adapt to it, Rio
Tinto Alcan has partnered with Ouranos, a joint
initiative of the Quebec government, HydroQuébec, Environment Canada, the Université
du Québec à Montréal, Université Laval, McGill
University, and INRS University. Named after the
mythological Greek god of the sky, the non-profit
research consortium is working to further research on
climate change in the province, and studying the future
impact of these changes on water management. Rio Tinto
Alcan has invested $500,000 in the partnership and was the
organization’s first private sector member. The company hopes
the research will assist its water resource management operations
and improve hydrological forecasting.

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Source: University of Guelph

Engineering success
Canada is facing a future of dramatic demographic
changes, shortages of skilled labour and intense
competition from emerging economies. A key priority
for the country is to equip younger Canadians with
the skills and knowledge they need to succeed in a
technology-based and innovation-dependent economy.
Linamar Corporation, a leading supplier to the global
automotive and mobile industrial equipment markets,
recognizes the value of investing in, developing and
motivating today’s students. In 2011, Linamar donated
$1 million to the University of Guelph’s School of
Engineering, enough to fund 10 entrance scholarships
a year in perpetuity, each worth $2,500. Linda
Hasenfratz, Chief Executive Officer of Linamar, says
that the company’s ability to compete around the
world depends on product and process innovation,
and “the key to doing so successfully is plenty of
strong engineers with a solid grounding in practical
and theoretical knowledge.” In addition to nurturing
tomorrow’s highly skilled engineers, the scholarship
program enhances the university’s ability to attract top
students who excel in design and innovation. Each year, five
scholarships go to students arriving at the university directly from
high school and five to students who are transferring from collegelevel and international technology programs.

A whale of a tale
The North Atlantic right whale is among the world’s rarest and most
endangered whale species. For centuries, they were hunted for their oil,
meat and baleen (whalebone), to the point where there are now
believed to be fewer than 500 in existence. The Bay of Fundy is a
natural habitat for the North American right whale due to
the area’s strong tidal currents, which concentrate large
quantities of the tiny crustaceans on which the
whales feed. Until a decade ago, however, the
whale population in

Source: Irving Oil Limited

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7

the Bay of Fundy was in sharp decline as a result of collisions with large
ships. Determined to lessen the impact on whales and reduce the
likelihood of ship strikes, managers at Irving Oil Limited partnered
with the New England Aquarium and Dalhousie University on a research
project that recommended changes to the shipping lanes in the area, a
plan that was adopted by the International Marine Organization. The
relocation of the shipping lanes in 2003 – the first time shipping lanes
had ever been altered to protect an endangered species – reduced the
danger of ship collisions with whales by 90 percent, and since then
there have been no known ship strikes in the Bay of Fundy. Irving Oil’s
commitment to science-based conservation efforts continues through
its ongoing involvement in, and financial support for, whale research,
conservation and education efforts.

It’s good for you
Located on the campus of the University of Manitoba, the Richardson
Centre for Functional Foods and Nutraceuticals is at the forefront of
research into the effects of diet on health and disease prevention. The
centre has two primary roles: to investigate and develop foods with
demonstrable health benefits beyond providing energy, vitamins and
minerals; and to promote the development of an economically viable
functional food and nutraceutical industry in western Canada based on
crops important to the Prairie region, including cereals, pulses, oilseeds,
berries and cherries and native plants. Winnipeg-based James
Richardson & Sons, Ltd., Canada’s largest privately owned agribusiness,
is a major financial supporter of the centre. Since its inception in 2006,
the Richardson Centre for Functional Foods and Nutraceuticals has
performed a wide variety of research projects on behalf of the
agri-food, natural health product and pharmaceutical
industries. For example, researchers have looked at
ways to lower cholesterol in humans using naturally
occurring products such as whole grains, dairy and
oils. Other projects have focused on the health
benefits of consuming canola, flax oils, pulses and
buckwheat, improving heart health with herbs
and spices, and improving levels of blood lipids,
such as fatty acids, with plant extracts and
high-fiber barley foods. One current study
is aimed at determining whether expensive
protein powders are any better than chocolate
milk as a post-workout supplement to hasten
muscle recovery and build strength.

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Accelerated outcomes

Source: Nordion Inc.

Nuclear medicine involves the use of tiny amounts of radioactive
material to diagnose and treat a wide variety of diseases, including cancer
and arthritis. At TRIUMF, one of the world’s leading subatomic physics
laboratories, researchers from Nordion Inc. are developing new ways to
enhance the health of patients around the world. Owned and operated
by a consortium of 16 Canadian universities, TRIUMF operates the
world’s largest cyclotron, a special type of particle accelerator that
is used to conduct physics research. Nordion has had a 30-year
commercial relationship with Vancouver-based TRIUMF,
resulting in a number of pioneering developments in
molecular imaging technology. Through TRIUMF,
Nordion has also forged new partnerships with
biopharmaceutical companies for the manufacture
of products used in diagnosing cardiac disease and
neurological disorders. Nordion and TRIUMF are
planning future research and development activities
in the areas of radiochemistry and biology that will
explore new approaches for imaging, treatment and
diagnosis of disease.

The right moves
More than 100,000 Canadians live with Parkinson’s
disease, a chronic degenerative disease of the central
nervous system that can cause shaking, difficulty of
movement and dementia. Although there is no known cure for
Parkinson’s, exercise has been found to be effective in mitigating
the symptoms. Sun Life Financial Inc. has committed $250,000 to
support research at Wilfrid Laurier University into Parkinson’s disease,
as well as other brain-related movement disorders such as Huntington’s
disease and Tourette’s syndrome. The Sun Life Financial Movement
Disorders Research & Rehabilitation Centre focuses on finding ways to
slow the progression of Parkinson’s disease through the development of
exercise regimes that are proven to benefit a patient’s balance, gait and
coordination. With Sun Life’s support, the centre has built a reputation
as the top Parkinson’s research facility in Canada.

ANNUAL REPORT 2012
CANADIAN COUNCIL OF CHIEF EXECUTIVES

Source: Sun Life Financial Inc.

9

Driving research
Source: Chrysler Group LLC

Launched in 1996, the Windsor, Ontario-based Automotive
Research and Development Centre (ARDC) began as a $30
million joint initiative of Chrysler Canada Inc. and the
University of Windsor. The first partnership of its kind
in Canada, it has since attracted more than $600 million
in investment. The goal of the centre is not only to
produce smarter, more durable and safer cars, but to
train new generations of Canadian engineers capable
of leading-edge research and development in the global
automotive industry. The 200,000-square-foot facility,
equipped with six road-test simulators, enables
Chrysler employees to work side-by-side with a wide
range of researchers and students at all levels from the
university. Priority research areas include alternative
fuels and fuel efficiency, automotive lighting, recycling
and corrosion resistance.

A sea change
Scientists have known since the 1930s that omega-3 fatty acids are
essential for normal human growth, but it was only in the 1990s that
public awareness of its health benefits increased dramatically. A
Canadian entrepreneur, John Risley, played a significant role in the
commercialization of omega-3 supplements. Mr. Risley, the founder,
president and chief executive officer of Clearwater Fine Foods Inc.,
began studying the possible health advantages of fish oil after seeing
scientific evidence supporting its benefits for the heart and brain. In 1997
he launched Ocean Nutrition Canada. Working closely with experts, the
company developed a breakthrough technology that transformed fish oil
into a tasteless, odorless powder finer than flour – a supplement that
could be added to a wide range of food products, from beverages to
bread. Today, Ocean Nutrition is the world’s leading supplier of omega-3
ingredients to the dietary supplement and food manufacturing sectors –
a multi-billion-dollar market, fueled by increasing media attention,

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Source: Ocean Nutrition Canada Ltd.

consumer awareness and proven health benefits. In May 2012, Ocean
Nutrition was sold to a Dutch-based company for $540 million –
compelling evidence of innovation’s potential to create value.

On track
As cities around the world become increasingly congested, the need for
smarter and more durable urban transportation solutions is growing
more acute. Bombardier Inc., in partnership with Queen’s University, is
testing a new generation of reinforced concrete that could be used
to build stronger, longer-lasting transportation infrastructure.
The company is working with a team of civil engineering
students to build and evaluate a 1.5-kilometre-long
monorail train track just outside Kingston, Ontario.
Traditional reinforced concrete is built with steel
rods, which are heavy and prone to rust, causing
the concrete to crack and crumble. The new
monorail test track is reinforced with fibreglass
bars and rods, which weigh one-third as much
and last much longer. “It’s a chance to test our
technologies and designs in collaboration with
a multinational company,” says Dr. Amir Fam,
professor of structural engineering and Canada
Research Chair in Innovative and Retrofitted
Structures. Queen’s researchers have been doing
pioneering work in the area of fibre-reinforced
polymers for more than 17 years. With Bombardier’s
involvement, the technology could soon be ready for
real-world application in urban transportation systems.

Source: Bombardier Inc. and Queen’s University

Synchronicity
Canada is among the world’s leading producers of nickel, and Vale
Canada Limited is the country’s foremost producer of the metal. Nickel
is a key ingredient in stainless steel as well as batteries and various other
industrial and consumer products – but the toxicity of different chemical
forms of nickel can vary significantly. For nickel producers,
understanding the chemical differences that make some nickel
compounds toxic and others harmless is the key to satisfying stringent
regulatory requirements and validating safety standards. To protect its
employees and the environment, Vale Canada works closely with
scientists at Canadian Light Source (CLS), Canada’s national synchrotron
research facility. Located at the University of Saskatchewan, the
synchrotron is one of the largest science projects in Canadian history.
Using radio frequency waves and powerful magnets to accelerate

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Source: Canadian Light Source Inc.

electrons close to the speed of light, the synchrotron
enables scientists to study the microstructure and
chemical properties of materials down to the
atomic level. In Valeâ&#x20AC;&#x2122;s case, that means gaining a
detailed understanding of the chemical nature of
nickel particulates found in mines and processing
facilities. The CLS synchrotron is a unique and
valuable tool for companies in a wide range of
industries, from biotechnology to manufacturing. Among
other applications, Canadian companies have used it to
develop more effective paints and motor oils, design new
drugs, create safer medical implants and build more powerful
computer chips.

Neonatal nurturing
Eight per cent of babies in Canada are born prematurely, putting them at
increased risk of respiratory illness, infection, developmental problems
and even death. Most require constant monitoring to detect any
deterioration in their vital signs or other subtle warnings of complications
or disease. To help doctors make better, faster decisions regarding the care
of premature infants, a team of researchers worked closely with IBM
Canada Ltd. on a breakthrough software project using advanced stream
computing. The result was Project Artemis, a highly flexible, real-time
monitoring system that enables healthcare professionals to detect certain
life-threatening conditions such as infection up to 24 hours faster than is
possible with traditional approaches to neonatal monitoring. The IBM
software analyzes vast quantities of biomedical data collected from
critically ill babies at up to 1,000 readings per second, as well as
environmental data gathered from advanced sensors and more
conventional bedside monitors.

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Operation simulate

Apps everywhere
In today’s highly interconnected world, service availability and reliability
are critical. In fields such as mobile computing, telephony and banking,
interruptions in service can trigger financial losses and customer
dissatisfaction. The impact can be even more serious in safety-critical
situations, such as traffic control systems. To improve the reliability
and performance of mobile communications, Ericsson Canada Inc.
and the Natural Sciences and Engineering Research Council (NSERC)
partnered with researchers at Concordia University on a project
known as MAGIC (Modeling and Automatic Generation of
Information and upgrade Campaigns for Service Availability).
The project focussed on ways of improving and standardizing
so-called “middleware” – the software layer that lies between a
mobile device’s operating system and its applications software.
By standardizing the middleware, the researchers have made
it possible for applications to run reliably on a wider variety of
mobile devices from different manufacturers. At the same time,
resesarchers helped Ericsson figure out how best to upgrade
software applications and repair glitches without interrupting
the services they are delivering to the end-user.

Source: CAE Inc.

Based in Montreal, CAE Inc. is recognized worldwide as a
developer of flight simulators that are used to train
commercial and military airline pilots. But by
leveraging its knowledge of advanced simulation
technology, the company is also helping to train
the next generation of healthcare professionals.
In 2009, CAE partnered with the Université de
Montréal to create one of Canada’s largest
healthcare simulation centres. The centre offers
training in a risk-free environment to more than
1,000 medical students each month. It also
functions as a joint research and development
site, enabling CAE Healthcare and the university’s
medical faculty to work together to design and test
new educational tools – including life-like robotic
mannequins – that improve and enhance the safety and
efficiency of patient care. The centre is equipped with 12
rooms that can be used to simulate different environments: a
hospital, an ambulatory environment, a private medical practice,
an external clinic, an emergency room and so on. The centre stresses the
importance of teamwork, communication, error avoidance and error
mitigation in improving patient outcomes. This year the centre was
accredited by the Royal College of Physicians and Surgeons, recognizing
that the facility effectively improves the quality of the educational
experience offered to its students.
Source: Ericsson Canada Inc.

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From field to fuel

Source: Husky Energy Inc.

Canada’s federal and provincial governments have mandated the use of
ethanol in gasoline to lessen the country’s reliance on fossil fuels, reduce
pollution and promote economic growth in rural areas. Husky Energy
Inc. is a leading producer of starch-based ethanol and has invested
heavily in two large-scale ethanol plants. Husky has committed $1.625
million over five years to the University of Manitoba to fund biofuels
research, plus another $1 million to support longer-term research
beyond the initial five-year period. The biofuels research program,
led by plant scientist Dr. Anita Brûlé-Babel, focuses on developing
high-yield, disease-resistant winter wheat varieties, boosting yields,
improving the ethanol production process and making better use of
ethanol by-products, such as dried distillers grain. The knowledge and
experience gained from these studies will contribute to the development
of long-term strategies for improved grain yields for future food, feed
and fuel purposes.

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The energy to innovate

Source: Cenovus Energy Inc.

Canada’s oil sands contribute about 6.5 per cent of the country’s overall
greenhouse gas (GHG) emissions, or about 0.1 per cent of the world’s
total emissions. GHG emissions per barrel of oil from the oil sands
have fallen by roughly a third since 1990, but the industry knows
it needs to go further to mitigate the environmental impacts of energy
production. As a result, 12 of Canada’s leading energy producers have
taken the unprecedented step of pooling their environmental research
efforts. Canadian Natural Resources Limited, Cenovus Energy Inc.,
Imperial Oil, Nexen Inc., Shell Canada Energy, Suncor Energy,
Teck Resources Limited, and several other producers, have joined
forces to create Canada’s Oil Sands Innovation Alliance (COSIA).
Bringing together researchers from industry, universities and
government, the alliance is intended to improve collaboration and
promote innovation with the goal of overcoming the most pressing
oil sands environmental challenges.

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Year in
Review

The Canadian Council of Chief
Executives enables CEOs and
leading entrepreneurs from every
region and every major industry
to devote time and energy to
addressing key issues that affect the
country as a whole. Our primary areas
of focus include: fiscal policy; innovation;
energy and the environment; North
American economic cooperation;
and international trade and investment.

Examples of our work over the past year:

Fiscal policy
A responsible fiscal framework is a Canadian competitive advantage.
At a time when economic uncertainty continues to cast a long
shadow over the global economy, the CCCE believes it is
essential that Canadian governments strive to balance their
budgets and constrain the growth in public spending. The
federal government has made significant progress toward
that goal. From a peak of $42.6 billion in 2009-2010, the
federal deficit declined to an estimated $24.9 billion
at the end of fiscal year 2011-12. Federal program
spending continues to grow, but at a modest pace,
and the government appears on track to return to
surplus by 2015-2016.
As a percentage of Canadaâ&#x20AC;&#x2122;s overall deficit challenge,
provincial budgets are a much greater concern than
in the mid-1990s, the last time the country faced
significant budgetary shortfalls. In 2012-2013,
Canadaâ&#x20AC;&#x2122;s provincial governments will incur an
estimated combined deficit of $22 billion. British
Columbia, Alberta, Quebec and Nova Scotia are expected
to balance their budgets in 2013-2014. At the other end
of the spectrum, Ontario is wrestling with a $15.3 billion
deficit and does not expect to achieve balance until 2017-2018.
Progress in reducing deficits has stalled in many provinces,
highlighting the urgent need for governments to find more efficient
ways of delivering services. Of particular concern are rising health care
costs, which account for roughly half of provincial budgets.

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-10

-24.9

-30

-50

7.8

0.5
0.0

-1.3

-0.5

-10.2

-20

-40

3.4

-1.0
-1.5

-21.1

-2.0

-33.4

% of GDP

During the past year, CCCE members have
exchanged views on Canada’s evolving
economic conditions with a range of senior
federal and provincial decision-makers,
including Bank of Canada Governor Mark
Carney (Winnipeg, October 2011) and
Finance Minister Jim Flaherty (Toronto,
January 2012). Governor Carney also
participated in a special teleconference for
CCCE members after the release of the
Bank’s July 2012 Monetary Policy Report.

Deficit/surplus ($billions)

The CCCE agrees with the recent recommendation of the House of
Commons Standing Committee on Finance for a comprehensive review
of Canada’s tax system. The Organisation for Economic Cooperation and
Development, in its 2012 Economic Survey of Canada, noted that Canada
has made significant progress in reducing the statutory corporate income
tax rate. Even so, the complexity of the tax system imposes a significant
administrative burden on Canadian workers and business
owners. Comprehensive tax reform that focuses on
fostering investment and savings, and that
reduces the disparity in treatment between
Federal deficit
small and large firms, would enhance Canada’s
medium-term economic growth prospects
10
while encouraging smaller companies to
expand, invest and enter new markets.
0

Energy and the Environment
Energy production and research into advanced energy
technologies are important drivers of economic growth. The
CCCE believes that Canada’s political leaders should agree
on a broad strategy that would maximize the potential
of Canada’s diverse energy resources. In a submission
to the premiers and territorial leaders prior to their
July 2012 meeting, we outlined 10 key elements of
such a strategy, including efforts to diversify
Canada’s energy export markets, streamline
regulatory processes, ensure consistency in
climate policies, and address the labour market
needs of the energy sector. The Council also
called for stronger partnerships with Aboriginal
peoples on energy projects. “Addressing the
role of Aboriginal communities in energy and
resource development begins with early
engagement and a true spirit of building stronger
relationships,” the CCCE submission said.
An earlier CCCE paper, Energy-Wise Canada:
Building a Culture of Energy Conservation, emphasized
the importance to business and consumers of improved
energy efficiency. We urged governments not to shield

Source: Canadian Natural Resources Limited

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17

Canadians from higher energy prices, which play an important role
in motivating individuals and companies to change their energy
consumption habits and investment decisions.
In April 2012, some 65 CCCE members toured Canadian Natural
Resources’ Horizon oil sands facility and Cenovus Energy’s Christina
Lake project, both in northeastern Alberta. The trip enabled CEOs from
across Canada to learn about the scale of investments and some of the
innovations that are improving environmental performance while
generating significant economic spinoffs for the rest of the economy.

“Global demand for energy is expected to rise by 40%
by 2035 as economies in both developed and emerging
countries continue to grow and the standard of living
improves in the developing world.”
- International Energy Agency

Canada is the world’s:
• 2

nd

• 3rd
• 3rd
• 6th

Innovation

largest producer of uranium

The federal government spends $5 billion
a year to support private sector research,
largest producer of hydro-electricity
but Canada still lags its international peers
in business innovation. In the fall of 2011, a
largest producer of natural gas
federal independent panel on research and
development – led by CCCE member Tom
largest producer of oil
Jenkins, Executive Chairman and Chief
Strategy Officer of Open Text Corporation – put forward a series
of recommendations that would simplify federal R&D incentive
programs, reduce compliance costs, promote commercialization
of new technologies, and target assistance more directly at
innovative companies.
A number of the panel’s key recommendations were
reflected in the government’s 2012 budget. However, the
government chose a different approach to amending
the $3.5 billion-a-year Scientific Research and
Experimental Development (SR&ED) tax credit
program. The CCCE is concerned about two
changes in particular: the government’s
decision to reduce the value of the SR&ED
credit from 20 to 15 per cent for medium and
large firms, and the elimination of claims
for capital costs associated with research
projects. “Some of the suggested changes
may backfire by reducing the incentives
for large enterprises to conduct R&D in
Canada,” we said in a submission to the
House of Commons Standing Committee
on Finance.

18

ANNUAL REPORT 2012
CANADIAN COUNCIL OF CHIEF EXECUTIVES

North America

Business investment in Canada
(billions)

350
For years, Canada and the United States have
300
wrestled with the need to improve the
250
management of our shared border. In
200
$265.1
$233.1
December 2011, Prime Minister Stephen
150
100
Harper and President Barack Obama
50
announced that the two countries had agreed to
0
implement two action plans designed to speed
2009
2010
up legitimate trade and travel, improve security,
Source: Bank of Canada
and align regulatory approaches between the two
countries. The CCCE welcomed the announcement as
“a significant and much-needed step forward in CanadaU.S. cooperation.” Of the 36 border-related recommendations put
forward by the CCCE in an earlier submission to the Government of
Canada, 27 were incorporated in the bilateral action plans.

$288.3

2011

$360.3

2012 – intentions

For manufacturers and exporters on both sides of the border, a key
priority is the construction of a second bridge connecting Windsor,
Ontario, and Detroit, Michigan. Fully a quarter of all Canada-U.S. trade
enters or leaves our country through the heavily congested DetroitWindsor corridor, and commercial traffic at that crossing is expected to
triple over the next three decades. In June 2012, Prime Minister Harper
and Michigan Governor Rick Snyder signed an agreement to expedite
construction of a new, publicly owned bridge, the Detroit River
International Crossing. Under the agreement, Canada will be responsible
for building, financing and operating the new bridge, likely with private
sector involvement. The CCCE called the announcement “highly
encouraging,” adding it would “help companies that rely on just-in-time
production to keep costs down and improve their competitiveness”.

Highlights of the Canada-U.S. border plan:
• Upgrades to key border crossings
• Common approach to screening
cargo from offshore
• Expedited temporary entry
for business visitors
• Expansion of the
NEXUS program for
trusted travellers
• Streamlined customsreporting requirements
for importers
• Common approaches
to food and motor
vehicle safety standards
ANNUAL REPORT 2012
CANADIAN COUNCIL OF CHIEF EXECUTIVES

19

International
Facing the prospect of slow recoveries in the
United States and Europe, Canadian exporters
are increasingly looking to emerging
economies for growth and opportunity. In
2011, the CCCE and the Canada China
Business Council published an influential
study by economist Wendy Dobson that
called on Canada to move beyond “ad hoc
arrangements” by developing both closer
ties with Asia and a focused strategy based
on ambitious targets for trade and
investment. The report, “Canada, China and
Source: Office of
Rising Asia: A Strategic Proposal,” helped set
the Prime Minister
the
stage for the launch of a significant new
of Canada
CCCE initiative that is examining Asia’s growth,
the rapid expansion of the global middle class and
the impact on Canada’s economic prospects in the
21st century. In 2012, to encourage debate on what Canada
needs to do to succeed in a rebalanced global economy, we
published eight papers and essays examining various aspects of the
Canada-Asia relationship. We also announced our intention to host
“Canada in the Pacific Century,” a major conference in Ottawa for
200 business leaders, senior government officials and representatives
of aboriginal communities, labour and other sectors.
As a longstanding proponent of an ambitious Canadian trade strategy, the
CCCE looks forward to the anticipated completion of economic
partnership negotiations with the European Union in late
2012. We also continue to offer advice and support to
the federal government as Canada seeks to forge
Where the world’s middle
closer ties with India, Japan, Brazil, Australia and
other markets that hold promise for Canadian
class consumers will live
companies. In June 2012, the CCCE strongly
in 2030
welcomed Canada’s entry into the Trans-Pacific
Partnership (TPP), a multilateral set of
Africa and
negotiations that has the potential to spur
North
America
Middle East
Europe
economic growth around the Pacific Rim.
7%
7%
Asia Pacific
14%
Speaking on behalf of Canada’s business
Central and
leaders, Mr. Manley expressed the hope that
6%
South America
66%
the TPP would lead to “significant reforms in
areas such as intellectual property protection,
regulatory cooperation, rules of origin and
non-tariff barriers, agricultural trade, and
investment and services liberalization.”
Source: OECD

20

ANNUAL REPORT 2012
CANADIAN COUNCIL OF CHIEF EXECUTIVES

Events & Publications

Event highlights
CCCE delegation to Japan

Tokyo – September 25-26, 2011

Autumn Members’ Meeting

Winnipeg, MB – October 3-4, 2011

“The way forward: Canada’s decade of opportunity”
Remarks to the Canadian Business Leadership Forum
Toronto, ON – October 19, 2011

CCCE delegation to China

Beijing and Chongqing - November 19-23, 2011

New Year Members’ Meeting

Toronto, ON – January 16-17, 2012

World Economic Forum Annual Meeting

Davos-Klosters, Switzerland – January 25-29, 2012

Aspen Institute dialogue on Canada’s economic
and fiscal renaissance

Source: Canada China Business Council

Washington, D.C. – March 28, 2012

CEO Summit of the Americas

Cartagena de Indias, Colombia – April 13-14, 2012

Members’ tour of oil sands facilities

Fort McMurray and Christina Lake, AB – April 30, 2012

Spring Members’ Meeting

Calgary, AB – April 30- May 1, 2012

Remarks to the Petroleum Club
Calgary, AB – May 16, 2012

Remarks to the Canadian American Business Council

Washington, D.C. – June 7, 2012

Remarks to the New England Business Council
Boston, MA – June 21, 2012

Golden opportunities and surmountable challenges: Prospects
for Canadian agriculture in Asia
By Michael Gifford

April 2012

A northern tiger? Canada’s economic and fiscal renaissance
and its implications for the United States
By Jeremy Leonard
March 2012